France's economic lag in Europe with declining GDP per capita

France is now poorer than the European average in terms of GDP per capita, according to Eurostat's latest 2024 estimates. This decoupling, which has accelerated over the past decade, fits into a sluggish 0.9% growth in 2025, far below the EU's 1.6%.

Long one of Europe's most prosperous countries, France's GDP per capita fell 2% below the average of the EU's 27 countries in 2024, according to Eurostat data. This drop below the average began in 2022, marking a decade of gradual slowdown.

Éric Dor, director of economic studies at Iéseg School of Management, explains: « This ranking is expressed in purchasing power parity, that is, taking into account price differences between countries. It thus allows comparison of the real standard of living of the population. »

On growth, the French economy advanced only 0.9% in 2025, per Insee's national accounts released on January 30, 2026. This follows 1.4% in 2023 and 1.2% in 2024, compared to 1.6% for the EU. Economy Minister Roland Lescure hailed on TF1 a « robust » growth, better than the initial 0.7% forecast. The Banque de France had predicted 0.6% in June 2025, amid a trade war started by Donald Trump, capped at 15% tariffs on European exports.

This productivity shortfall highlights a broader decoupling, where France lags behind neighbors like Cyprus or Belgium in living standards.

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Realistic illustration of France's credit rating downgrade by S&P to A+ amid fiscal uncertainty, featuring the Eiffel Tower and economic charts.
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S&P downgrades France's rating to A+ due to fiscal uncertainty

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Rating agency S&P Global Ratings downgraded France's sovereign rating from AA- to A+ on Friday, October 17, citing high uncertainty over public finances despite the 2026 budget proposal. The move, expected but earlier than scheduled, primarily punishes ongoing political instability. The government reaffirms its commitment to deficit reduction.

In a chronicle published on January 31, 2026, economist Nicolas Baverez portrays France as Europe's Argentina, undermined by demagoguery that impoverishes the middle class and drives the exodus of talents and capital. Wealth per inhabitant fell to 38,110 euros in 2024, ranking the country 34th worldwide and 7% below the EU average for the third consecutive year.

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Despite statistical gains, purchasing power remains the French public's top worry for 2026 per the recent Odoxa poll for Le Figaro—outranking insecurity and immigration. In response, new Minister Serge Papin proposes tax-free withdrawals from company savings plans for low-wage earners.

Geopolitical tensions, political instability in France, and falling interest rates are prompting savers to rethink their plans and take on more risk to chase better returns. French people are still saving heavily, with a record savings rate of 8.4% of disposable income in Q3 2025. Demand for savings products like life insurance and stocks is surging.

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On October 14, 2025, Prime Minister Sébastien Lecornu presented the 2026 finance bill, aiming to cut the public deficit to 4.7% of GDP through €14 billion in extra tax revenues and €17 billion in spending savings. The budget targets high earners, businesses, and social expenditures, while drawing criticism over its feasibility.

The thirteenth edition of the annual 'Fractures françaises' survey, conducted by Ipsos for Le Monde, highlights growing distrust in French democracy. Nearly 96% of French people say they are dissatisfied or angry about the country's situation, with 90% believing the nation is in decline. This political instability, marked by governmental crises, strengthens the sense of dysfunction.

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Following Parliament's unanimous adoption of a special finance law on December 23, 2025, to bridge funding amid failed 2026 budget talks, Prime Minister Sébastien Lecornu insists a compromise remains possible in January. Yet, the measure—echoing last year's—prolongs uncertainty rooted in the June 2024 National Assembly dissolution, with significant fiscal and political costs.

 

 

 

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